Cape News

On January 14, 2025, a hearing was held on the topic of making the Trump tax cuts permanent. Chairman Smith opened the session with remarks emphasizing the urgency of legislative action to maintain the current tax structure.

"If we want to continue President Trump’s legacy of a strong economy, Congress must act swiftly to make the tax cuts permanent," stated Chairman Smith.

He highlighted that there are only 142 legislative days left before taxes could increase for all Americans if Congress does not intervene. Smith warned that in one year, working Americans might face an average tax increase of 22 percent.

Smith reflected on the impact of tax cuts during Trump's presidency, stating they were "the rocket fuel that propelled America out of the stagnation of the Obama years." He claimed that American workers and the economy improved significantly during this period.

According to Smith, low-income taxpayers benefited more from these cuts compared to those at higher income levels. He noted that Americans earning under $100,000 received a 16 percent tax cut while taxes paid by the top 1 percent increased.

He further pointed out that small business optimism reached record highs and American corporations retained their operations domestically, leading to economic growth and job creation. Smith cited data indicating that after the 2017 tax cuts, economic growth exceeded projections by one percentage point annually over two years.

Smith expressed concern about potential negative consequences if these tax cuts are not made permanent. Families might face higher grocery costs due to increased taxes; child tax credits could be halved for millions of parents; and family farmers could see significant reductions in death tax exemptions. Additionally, small businesses might encounter a top tax rate much higher than international competitors like China.

The Chairman underscored how uncertainty affects business decisions related to investment and expansion. He stressed the importance of removing such uncertainty by solidifying the 2017 tax cuts as a step toward fostering another economic boom under a possible second Trump presidency.

Smith outlined projected benefits from making these cuts permanent: "$284 billion in new GDP growth from a boom in manufacturing," "$150 billion in new small business GDP growth," and "$50 billion in Opportunity Zone investments."

Finally, he urged prompt congressional action to provide timely relief for families and businesses: "We must not leave families and small businesses waiting for Congress to do the right thing and provide tax relief at the 11th hour."

The hearing included testimonies from individuals whose lives were positively impacted by these past policies.